This paper estimates the impact of India's railroad network on trade costs, interregional price gaps, trade flows, and real income levels during the colonial period. Using archival data from colonial India, the author develops a general equilibrium trade model to analyze how railroads reduced trade costs and increased welfare. The study finds that railroads significantly reduced trade costs, increased interregional and international trade, and raised real income levels by 16%. The results suggest that a sufficient statistic for the effect of railroads on welfare can explain the observed impact on real income. The author also addresses concerns about selection bias by analyzing "placebo" railroad lines that were never built. The study contributes to the literature on estimating the economic effects of large infrastructure projects and the "social savings" of railroad projects. The findings highlight the importance of transportation infrastructure in improving trade and welfare, and provide insights into the mechanisms through which railroads enhanced economic outcomes. The paper uses a comprehensive dataset on prices, output, rainfall, and trade flows in colonial India to support these findings. The results demonstrate that railroads had a significant positive impact on the Indian economy, improving trade efficiency and increasing real income levels.This paper estimates the impact of India's railroad network on trade costs, interregional price gaps, trade flows, and real income levels during the colonial period. Using archival data from colonial India, the author develops a general equilibrium trade model to analyze how railroads reduced trade costs and increased welfare. The study finds that railroads significantly reduced trade costs, increased interregional and international trade, and raised real income levels by 16%. The results suggest that a sufficient statistic for the effect of railroads on welfare can explain the observed impact on real income. The author also addresses concerns about selection bias by analyzing "placebo" railroad lines that were never built. The study contributes to the literature on estimating the economic effects of large infrastructure projects and the "social savings" of railroad projects. The findings highlight the importance of transportation infrastructure in improving trade and welfare, and provide insights into the mechanisms through which railroads enhanced economic outcomes. The paper uses a comprehensive dataset on prices, output, rainfall, and trade flows in colonial India to support these findings. The results demonstrate that railroads had a significant positive impact on the Indian economy, improving trade efficiency and increasing real income levels.